New Yorkers React To Retirement Numbers, Exclaiming ‘Who Could Save That Much?’

In a recent discussion on retirement savings with Vox, labor economist Teresa Ghilarducci laid out some stark benchmarks: by age 30, you should have saved one times your annual salary; by 40, two and a half to three times; and by 60, eight to 10 times. These numbers left many New Yorkers, like Vanessa Longshaw, a 34-year-old vice president in communications, astounded. “You can see I’m laughing because who could save that much?” she said. Ghilarducci acknowledged the daunting reality. “I know that real Americans just don’t have it. The math of what you’re supposed to have and what people actually do have is a huge gap,” she said. John Scott, director of the Retirement Savings Project at Pew Charitable Trusts, echoed this sentiment by pointing out that the median retirement savings for non-retired Americans is about $45,000, meaning half have even less. Steven Drukman, a 50-year-old playwright and professor, recognizes his shortfall with a mix of resignation and humor. “OK, alright, so I have some work to do,” he admitted, followed by nervous laughter. He has about $250,000 in savings and a TIAA Cref plan that could grow to $500,000 if he continues working. “I’m close, actually, now that I think about it,” he said, reflecting a cautious optimism. Ghilarducci explains that the underlying issue is systemic. “The reason why a coal miner and a lawyer could expect to retire is because of the design of our pension system, which we don’t have anymore,” she said. Traditional pensions, which provided a secure retirement, have largely been replaced by 401(k) plans, shifting the burden of saving and investing to individuals. Trending: Rory McIlroy’s mansion in Florida is worth $22 million today, doubling from 2017 — here’s how to get started investing in real estate with just $100 “We changed the federal pension laws, so you had the traditional pension becoming less attractive to employers,” Scott noted. The 401(k), initially meant as a secondary savings tool for higher-income individuals, has become most Americans’ primary retirement savings vehicle. For many, this shift has been challenging. Erma Bridgewater, a 72-year-old retired nurse, recounted the difficulty of maintaining her savings while managing two mortgages. “Having to dip into it all the time…I feel like it wiped me out,” she said. Younger workers, like John Cifuentes, a 27-year-old civil engineer, struggle. With a salary of $105,000, Cifuentes is aware of the need to save but finds it difficult to navigate the complexities of retirement planning. Vanessa Longshaw, who earns $140,000 annually, shares a similar struggle. After living and working in the UK for six years, she has about $15-16,000 in her 401(k) and contributes to a Roth IRA. “I navigated my twenties and my finances pretty much in a vacuum. And I made some mistakes,” she admitted. The lack of universal access to retirement plans exacerbates these challenges. “Half workers don’t have a way to save for retirement,” Ghilarducci emphasized. This contrasts sharply with other countries where workers are automatically enrolled in pension plans. In the U.S., individuals must actively choose to save, often without adequate financial education.